That said, “Disruptive technology megatrends continue to fuel strategic deal-making around the world, in spite of a difficult economic context,” continues Steger. “In the second quarter, we even saw new sub-trends emerge to drive deals, such as alternative input technologies like speech and handwriting recognition.

So, while the current macroeconomic challenges may dampen the appetite for large, transformative deals in the near term, expect to continue to see smaller, strategic deals — especially in the technology megatrends. “And the long-term outlook for global technology M&A remains strong,” Steger concludes.

Second quarter 2012 technology M&A highlights

Aggregate deal value of all disclosed-value deals fell 43% year-over-year (YOY) to $33.4 billion, but is up 33% sequentially

According to the report, resurgent macroeconomic uncertainty worldwide caught up to the technology industry, which had outpaced deal value for all industries in the first quarter of 2012 but fell behind in the second quarter. Nevertheless, global technology deal volume remained around the 730-deal average seen for the last six quarters.

Cloud deals surge

The cloud/SaaS megatrend drove the highest volume and value of global technology transactions for the second consecutive quarter. There were four cloud-driven deals among the quarter’s top 10, including the purchase of a SaaS company that also hosts a web-based B2B business exchange, two deals in which companies outside of the technology sector are buying data centers to offer cloud services and another purchasing cloud hardware and software.

Advertising/marketing technology targeted

All five disruptive megatrends came together to drive dozens of advertising/marketing technology transactions in 2Q12, including several acquisitions by large global advertising firms. Big data analytics to understand customers’ and prospects’ social networking activity was key to many of these deals.

Other targeted technologies included marketing automation SaaS and tools for optimizing mobile and online campaigns.

Corporate buys increase YOY but decline sequentially

At $28.9 billion, corporate aggregate deal value was down 37% YOY but increased 50% sequentially. Of note, the second quarter’s aggregate deal value YOY comparisons are with a 2Q11 that included many unusually large big-ticket deals, making for a tough YOY comparison.

2012 Technology M&A outlook remains relatively strong

“Disruptive technology megatrends continue to fuel strategic deal-making around the world, in spite of a very difficult economic context,” says Steger.

“In the second quarter, we even saw new sub-trends emerge to drive deals, such as alternative input technologies like speech and handwriting recognition, in addition to the convergence of “social-mobile-cloud” and big data analytics. The outlook for global technology M&A remains strong. But caution around executing large technology deals will persist in the near term until macroeconomic conditions improve.”

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